Euro area flash inflation jumps to 3.8% in September, above forecasts
Euro area annual HICP inflation rose to a flash estimate of 3.8% in September from 3.2% in August, above a Reuters poll expectation of 3.6%, Eurostat and Reuters reported on 2 October. Energy drove much of the jump; markets still see little chance of an ECB hike in October.
Euro area consumer-price inflation accelerated sharply in September, keeping pressure on the European Central Bank even as markets see scant odds of a move as soon as October, according to Eurostat’s flash estimate and Reuters coverage on 2 October.
Energy-led rebound above poll
Annual HICP inflation was a flash 3.8% in September versus 3.2% in August; a Reuters poll had expected 3.6%. Energy inflation rose to 18.8% from 14.3%; services to 3.2% from 3.0%; food, alcohol and tobacco to 1.4% from 1.1%; non-energy industrial goods eased to 1.1% from 1.2%. Core inflation excluding energy, food, alcohol and tobacco edged up to 2.5% from 2.4%.
ECB path: wait for more data
The ECB’s deposit rate stands at 2.5% after summer hikes. Markets still price up to three further increases over the coming year, but October hike odds are negligible and the next fully priced hike is not until January, Reuters reported. Capital Economics’ Jack Allen-Reynolds said the most likely path is for the ECB to wait until December before acting again.
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